Real-world test of market infrastructure for security tokenization
CMTA conducts successful test of full-scale infrastructure for tokenization
The Geneva-based Capital Markets and Technology Association (CMTA) has brought together Sygnum Bank and key DLT players in Switzerland, including Arab Bank, SEBA Bank, Hypothekarbank Lenzburg, Vontobel and Swissquote, to successfully test the full lifecycle of tokenizing securities. This test covered primary issuance, custody, secondary trading and settlement. Read the full press release here.
The commercialisation of asset tokens is still in its infancy, with the current solutions mainly consisting of piecemeal, unregulated offerings covering only one part of a security’s life cycle. This initiative is particularly significant because it demonstrates the ability for key digital asset infrastructure players and their solutions to work together and demonstrate the full value of tokenization for both issuers and investors.
Use of Sygnum’s Digital CHF token proves the benefits of an end-to-end on-chain transaction
As part of this initiative, Sygnum Bank undertook the secondary purchase and sale of a security token, with SEBA Bank and Hypothekarbank Lenzburg as counterparties. Sygnum’s Digital CHF (DCHF) token was used in the payment and settlement of the transactions, with fully on-chain delivery versus payment (DvP). This proves the viability and value of a tokenized ecosystem, where both securities and fiat are represented on tokens. DLT-based records and the ability to conduct real-time transfers mean the payment and settlement process can happen almost instantaneously, resulting in immediate DvP (T+0) – giving parties the choice to optimise between time for liquidity management and settlement risk.
Landmark interbank transaction in tokenized ecosystem
The transactions between Sygnum Bank and SEBA Bank/ Hypothekarbank Lenzburg also mark the first between regulated banks involving tokenized securities with on-chain settlement, and it is a step towards the realisation of a regulated, dynamic tokenized ecosystem. Sygnum, SEBA Bank and Hypothekarbank Lenzburg, together with other regulated players in the space, form trusted nodes in a growing network – between which tokens can be transferred seamlessly with full compliance. Given the early stage of the industry’s development, this type of cooperation is important and will facilitate a path towards mainstream adoption of digital assets and tokenization. At Sygnum, we are committed to collaborating with other players to build the ecosystem and realise the value of DLT in the financial industry.
“Sygnum and the other banks involved in this initiative are trusted nodes in a growing network between which tokens can be transferred in full regulatory compliance. In addition, with the use of Sygnum’s DCHF, these interbank transactions can be completed seamlessly with near instant delivery versus payment.”
Mathias Imbach, Sygnum Co-Founder